Ricky Ray Butler: How social media and “influencers” have upended the world of advertising
It is difficult to imagine the reaction of Don Draper, the chain-smoking protagonist of Mad Men, to today’s social-media advertising landscape. He’d be like a brook trout dropped into a tank of hammerhead sharks. Facebook, Instagram, YouTube—how would one even begin to describe things?
I recently had the chance to talk with someone who has figured out this landscape: Ricky Ray Butler. Ricky Ray is a social-media savant, one of the first people to realize the growing number of influencers with thousands and even millions of followers was growing exponentially. Where others saw a bunch of homemade videos, he saw a giant new advertising marketplace.
In 2009 Ricky Ray cofounded Plaid Social Labs, perhaps the first agency to connect advertisers with social media stars. In 2015 he joined Branded Entertainment Network (BEN), where he is now CEO (BEN took over Plaid). BEN works with advertising giants such as Disney, GM, Dyson, and the Gap and is the largest influencer-marketing company in the world. BEN uses data and AI to tell advertisers where to find eyeballs, how to keep those eyeballs around, and which eyeballs are their best potential customers.
Not that it was easy getting to this point. When Ricky Ray launched Plaid, he quickly found that $1,500 spent on an influencer could easily generate $40,000 in ad revenue. But scaling that up was difficult.
“We thought we had cracked this nut and found a gold mine.” Ricky Ray said to me. “Then we’d go to agencies, or different big brands, and get laughed out of the room. They’d say, ‘This is really terrible content—we don’t want to be associated with it.’ We tried to explain that the data-driven approach is to go where the viewers are. But it was a tough hill.”
But Ricky Ray stuck with it. Using data, Plaid developed what he calls a “consensus triangle.” Simply put, it flips the traditional creative path on its head. The advertiser outlines the goals of a campaign. Then the influencer or content creator takes that and devises a campaign—not the advertiser. That might be coming up with a product placement or working in a brand or product to a new video.
“The influencer has built an audience for a reason, and they usually have done that through communication,” Ricky Ray says. “They know how to best position a brand to their audience better than anyone else. So, what we found is when the brand and the content creator reach a consensus, something amazing happens. The audience is happy. It ended up being the solution where brands could work with a variety of content creators but also make an ROI. And they do it in a way where the brands, the influencer and the audience are all happy.”
That formula has proven wildly successful. Even during the pandemic, BEN doubled new-client bookings and grew revenue by 59 percent.
Ricky Ray is a complete AI nerd, and BEN has made AI and analytics core to its business—even self-identifying as “Built on AI.”
“There’s so much content and so many content creators out there that for humans, it’s really impossible for us to understand and comprehend it all,” he told me. “We had to invest in technology and AI in order to evolve as a business.”
Even today, most brands look only at public-facing, known data about users and views. But there is much more out there, Ricky Ray says. Using deep learning and neural networks, BEN can make sense of the billions of videos and images out there and predict where marketers can catch an emerging trend. “We’re able to predict not just views, we’re able to predict clicks and conversions.”
Over the past decade, the scope of change in the media landscape is mind-blowing. Netflix alone has more viewers and views than the top four cable networks. So does Amazon Prime. Over on YouTube, which now is the second-most popular search engine after Google, 88 percent of views go to influencers. And then there is TikTok, which is a rocket.
Yet Ricky Ray thinks social-media advertising still is in its infancy. “We’re just barely penetrating the blue ocean of content,” he said. “There are millions and millions of influencers we don’t yet work with, because brands are not ready to take their budgets and take this process to the next level.”